HG Vora Capital Management Bets Hard on Penn Entertainment

Penn Entertainment saw the company’s share rise by as much as 7% last week, as news transpired that HG Vora Capital Management, a hedge fund, had bought enough shares to push its total stake in the gaming and entertainment company to 18.5% of the total stock.

HG Vora Capital Management Determined to Appoint Right Candidates

The news was originally reported by Wall Street Journals, and this development comes at a time when investors are seeing heightened interest in gaming stocks which have been improving over the last several months and promising to remain resilient in the new year.

HG Vora Capital Management is also looking to assume board seats as it hopes to tighten control over the company and ensure that it steers it towards profitability. With Penn Entertainment now serving as the technological provider for the recently launched ESPN Bet, optimism is riding high.

HG Vora Capital is also run by a former Goldman Sachs banker, Parag Vora, who has long been keeping his hand on the gaming industry’s pulse and looking to further his presence in it. Yet, the bigger news here is that Vora is not going to relent until the fund has assumed board seats and is willing to challenge any refusal during Penn’s annual meetings that will begin on January 8, 2024, and run through February 7, 2024, according to reporting done by Wall Street Journal.

Essentially, HG Vora says that it has the means to handpick highly qualified directors who can help sort out what has been described as the “underperformance” of Penn’s Common Stock in a filing to the US Securities and Exchange Commission. As a reminder, Penn formerly used to be on the S&P 500’s index.

Bullish on the Outlook of Penn’s Stock in 2024

Analysts in the meantime remain bullish on Penn Entertainment’s stock and other gaming giants for that matter. A note sent to investors by Brandt Montour, an analyst at Barclays, claims that PENN Entertainment remains his favorite stock for the entire year, citing the successful launch of ESPN Bet.

Of course, this prediction, although reassuring, needs to be taken with a grain of salt as challenges may yet present themselves when looking into making good on any investment in the sector. Whether Montour’s prognostication is correct will probably depend on how Penn handles its internal affairs over the coming weeks. A boost to the common stock is already on the way – will it hold?